UPDATE 1-Thailand seeks LNG, new energy resources as gas reserves dwindle

Thu Jan 9, 2014 3:20am EST

Related Topics

* Domestic gas reserves will last for seven years -energy ministry

* Plans to import more LNG, open new bid for petroleum concessions

* Energy demand seen up 2.5 pct in 2014, natural gas up 4 pct (Adds quotes, details from the ministry officials)

By Khettiya Jittapong and Pisit Changplayngam

BANGKOK, Jan 9 (Reuters) - Thailand is seeking more imports of liquefied natural gas (LNG) and looking to other energy sources such as coal and renewables as domestic gas reserves will likely last only another seven years, senior Energy Ministry officials said on Thursday.

Thailand, which uses natural gas to generate nearly 70 percent of its power, has been struggling to secure long-term energy supplies as output growth and reserve replacement have not kept up with rising demand.

Thailand's proven reserves for natural gas dropped 10 percent from a year earlier to 9.04 trillion cubic feet in 2013, the first decline after the country began producing natural gas from the Gulf of Thailand more than three decades ago.

"We need to seek several alternatives to help boost domestic gas supplies, which will be depleted," said Suthep Liumsirijarern, permanent secretary at the Energy Ministry.

Thailand became the first Southeast Asian nation to import LNG in 2011 when it brought a 5-million-tonne-per-year terminal online. State-controlled PTT is now looking at setting up a new LNG terminal in a plan to double its import capacity.

But prices of LNG are two to three times higher than natural gas and that will push up electricity tariffs, Suthep said.

Thailand is also looking at buying power from neighbouring countries and plans to diversify energy sources into coal and renewables, he said.

It is also planning to open a new round of bidding for petroleum exploration concessions and extend the life of existing production-sharing contracts to boost output of natural gas from domestic fields.

The timing of any new exploration round, however, will depending on the policy of whatever government is in place after the elections that have been called for Feb. 2.

Caretaker Prime Minister Yingluck Shinawatra has called an election for next month but anti-government protesters want her to step down and be replaced by an appointed "people's council."

"We hope the new government will help amend regulations on petroleum concessions and open a new auction. If we do nothing or delay this, we could face a gas shortage," Suthep said.

Concession contracts due to expire in the next eight years include those held by Chevron Corp and PTT Exploration and Production, a subsidiary of PTT.

Coal will nearly overtake oil as the dominant global energy source by 2017, and only a drop in world gas prices could curb the use of the dirtier fossil fuel in the absence of high carbon prices, the International Energy Agency said in December.

In 2013, Thailand produced 3,037 million cubic feet of natural gas per day (mmcfd) and imported 990 mmcfd from Myanmar.

It also had 729 mmcfd from Thai-Malaysia joint development areas and imported 190 mmcfd of LNG last year. That was just enough to meet domestic gas needs of around 4,950 mmcfd.

Thailand's 2014 energy demand is expected to rise 2.5 percent on the assumption that the country's economy will grow 4-5 percent this year, versus a rise in energy use of 1.2 percent in 2013, the ministry said in a statement.

Demand for natural gas is expected to rise 4 percent in 2014, boosted by growing demand for electricity, it said. (Reporting by Khettiya Jittapong; Editing by Tom Hogue)

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